Hermés of Paris, Inc. v. Swain, 867 F.3d 321

Swain (New Jersey resident) was fired by Hermes in Nov. 2015 and sued Hermes and co-worker Lorenzo Bautista in New Jersey state court (claims: discrimination, hostile work environment, retaliation, breach of contract).
Hermes filed a § 4 FAA petition in federal district court to compel arbitration against Swain alone, citing a dispute resolution protocol Swain allegedly signed that covers claims between "you and [Hermes] ... and ... employees."
District court granted the petition in part (but denied an injunction of the New Jersey action under the Anti‑Injunction Act); Hermes appealed the denial of that relief is not contested here.
Swain does not contest arbitrability but argues the district court lacked subject matter jurisdiction because diversity is defeated when "looking through" to the underlying state suit (Swain and Bautista are both New Jersey citizens).
The Second Circuit considered whether to apply a "look‑through" approach for diversity purposes or to measure diversity only by the parties to the § 4 petition (Hermes and Swain).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal diversity jurisdiction over a § 4 FAA petition must be determined by "looking through" to the parties in the underlying dispute	Swain: courts must "look through" the petition to the underlying litigation, and because Bautista and Swain share citizenship, complete diversity is lacking	Hermes: diversity is assessed by the citizenship of the parties to the petition (and any Rule 19 indispensable parties), here Hermes and Swain are diverse	Court: Rejects look‑through for diversity; measures diversity by parties to the petition (Distajo controls) — jurisdiction exists
Whether a non‑signatory (Bautista) is an indispensable party under Rule 19, destroying diversity	Swain: Bautista is a third‑party beneficiary and thus must be joined, destroying complete diversity	Hermes: Even if Bautista were a beneficiary, joinder is not required under Rule 19; relief can be afforded without him and FAA’s arbitration policy reduces piecemeal‑litigation concerns	Court: Bautista is not indispensable under Rule 19; joinder not required

Doctor’s Assocs., Inc. v. Distajo, 66 F.3d 438 (2d Cir. 1995) (diversity for § 4 petitions is measured by parties to the petition and Rule 19 indispensable parties only)
Vaden v. Discover Bank, 556 U.S. 49 (2009) (approved "look through" only for federal‑question jurisdiction over § 4 petitions, not for diversity)
Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (FAA favors enforcement of arbitration agreements even when non‑signatories are parties to underlying dispute)
Doscher v. Sea Port Grp. Sec., LLC, 832 F.3d 372 (2d Cir. 2016) (recognizes Vaden’s limitation to federal‑question jurisdiction and treats Distajo as controlling for diversity)